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Germany faces electricity mix shift as new capacity needed

19 Apr 2011 17:51:32 | edem

Germany needs 10-12GW of new coal and gas-fired capacity by 2020 to balance the fluctuations in renewable electricity generation, new figures show.

The German energy agency Dena, which is partially owned by the government, said around 15 to 20 new gas or high efficiency coal-fired power plants will have to be built by 2020. In addition, the electricity production from combined heat and power plants will have to double from the current 11% to around 22% of total power production.

The government energy body also said that renewable capacity in 2020 will amount to 110GW, with wind power providing 47GW (14GW of which will be offshore), while solar capacity will amount to 50GW.

This is a more conservative forecast than one made by the German renewable energy agency that had previously predicted that installed capacity in 2020 will reach 122GW, with wind providing 53.5GW, solar power 51.7GW, biomass 10.8GW and hydro 6.2GW.

Whether it is 110GW or 122GW, it is clear that grid expansion will have to play a pivotal role, as Dena now predicts some 4,500km of high-voltage power lines and 200,000-400,000km of medium and low voltage power lines will have to be built.

This is an increase from Dena's previous study, which predicted that the country needs to build 3,600km of new high-voltage power lines to incorporate the 51GW of installed wind-power capacity expected to be available by 2020 (see EDEM 23 November 2010).

Acceptance talks

A nuclear phase-out and a shift in the future power generation mix is likely to increase household electricity prices by around 20%. Dena said the costs were justified and would pay-off in the long run but warned an open public discussion need to be held.

Coming to terms with the shift

Not everyone, however, has come to terms with the German government's decision to phase-out nuclear power by 2022 at the latest.

The country's nuclear forum, Deutsches Atomforum said on Tuesday that German nuclear reactors - even the ones set for a permanent shutdown - are among the highest performing reactors in the world.

According to the forum, of the 10 best nuclear reactors in the world, six were German, including the 1.4GW Unterweser, shut down in mid-March under the three-month government moratorium on the nuclear life extension deal (see EDEM 15 March 2011).

Costly concerns

Earlier this week, German power major RWE said it expects its long-term financial performance to profit from the nuclear shut-downs as wholesale power is likely to rise (see EDEM 18 April 2011).

RWE's confidence was not shared by all nuclear power operators. EnBW, which owns four nuclear reactors with a combined capacity of 4.6GW, said on Tuesday it aims to build around 3GW (or €8bn worth) of renewable capacity by 2020.

But as EnBW has been hard-hit by the German nuclear tax (see EDEM 7 September 2010), which at the time cut its investment plans for the next three years by €3.3bn, the company is now planning to divest a total of €1.8bn of assets by 2013 to help fund new projects.

"We consider the restructuring to be an opportunity as well. We are committed to our nuclear power plants and we are convinced that our facilities are safe. But we do not treat nuclear power as an end in itself," the CEO of EnBW Hans-Peter Villis said in a statement. "Similarly, one should not expect quick-fix solutions for the restructuring of the German energy system. It is too complex an issue."

Last week, the German government said the exit from nuclear energy will be made as soon as possible. The eight oldest nuclear reactors will most likely be decommissioned, while the rest should remain on line until 2022 at the latest. The government said the shortfall would be made up by renewable energy expansion, as well as new coal and gas-fired generation (see EDEM 15 April 2011). MV

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